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Stock impact report

New lira curbs to boost Turkish FX reserves but at longer-term price [Reuters]

AllianceBernstein Holding L.P. Units (AB) 
Last alliancebernstein holding l.p. units earnings: 4/28 06:20 am Check Earnings Report
Company Research Source: Reuters
New lira curbs to boost Turkish FX reserves but at longer-term price LONDON (Reuters) - Turkey’s latest squeeze of its $37 billion-a-day London lira market may succeed in boosting scarce hard currency reserves but analysts say it will not stem the lira’s decline and that the country’s reliance on foreign capital means it could backfire. The Turkish banking watchdog announced on Sunday it was capping local banks’ ability to conduct foreign exchange swap, forward and option transactions with foreign entities at just 1% of each lender’s equity, down from 10% previously. That effectively constrains Turkish banks’ ability to lend lira overseas, squeezing supply of the currency. Lenders discouraged from opening swap positions with counterparties abroad might also bring the money home, analysts said. The step, which follows a 14% decline in the lira year-to-date does not seem to have surprised markets — possibly because Ankara, convinced that offshore trade is the driver of lira speculation, Show less Read more
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